The Detroit News: A Detroit bankruptcy would be long, costly
The deepening financial crisis in Detroit has intensified hints that the city could opt for bankruptcy, but financial experts warn the move could cost taxpayers millions, stall economic development and take years to be resolved in the courts.
Bankruptcy is an option if the city can't win major concessions from its unions and if the state's tough new emergency manager law is suspended or repealed.
Under the law passed in March, an emergency manager appointed by the governor would have the power to throw out union contracts, sell off assets such as the Detroit Water & Sewerage Department and other powers to fix the city's fiscal crisis.
Attorney General Bill Schuette said he is undecided whether Michigan would revert to its old emergency manager law if opponents get enough signatures to put the repeal question on the ballot next year.
But bankruptcy would be a worst-case scenario, warned Brad Coulter, who specializes in municipal turnaround and bankruptcy services.
"That's where the opponents of an EM maybe don't quite understand the consequences if (the law is) repealed, and Detroit has no choice but to file for bankruptcy; I think it's going to be an expensive, time-consuming potential disaster,"
It is the burn down the city in order to save it school of malfeasance in action.
An EFM should have been done long ago, but Democrat party politics got in the way. Now the restoration will be that much harder and more difficult.
With reported long-term liabilities of 12 billion dollars and an annual deficit in the millions, and the reality is there's probably even more out there that has yet to be accounted for off the books due to the game playing that has been occurring in the city, fixing this situation is going to be a real mess.
Any plan that leaves the creators and perpetrators of the problem still in charge when the plan is in place or completed will be rather hard to take seriously.
1 comment:
It's going to be expensive no matter how you look at it, and of course, it isn't the mis-managers and crooks that are going to pay for it, it's all the rest of us in the state that are going to foot the bill.
If we are going to have to pay for their mess, then they need to drop the "It's our stuff and you ain't taking it away from us" mentality and the people of Michigan need a much bigger say in how things are run down there. Otherwise, they can all go to fiscal hell for all I care. The rest of us out here in the REAL Michigan will muddle on without them.
When they are ready to come back and be responsible about their management, then we can talk about working together.
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